Do You Need Gap Insurance For Your Central Oregon Vehicle?

You may have heard the “rumors” about gap insurance being a waste of money but, as with any form of car insurance, this form of “insurance protection” is only a waste of money until you actually need it, especially if you’re leasing a vehicle, like many people in Central Oregon do.

A Harsh Reality

The reality with gap insurance is that most car insurance policies don’t cover the vehicle owner financially if they are involved in a car accident, your car insurance is only designed to pay the lender what is the vehicles current cash value.

Average Vehicle Depreciation

In one year a typical vehicles value will depreciate by at least 30 percent in its first year and by the third year of the vehicle’s “life”, it will have lost at least 50 percent or more of its value.

What Gap Insurance Means To You

Let’s say you’re involved in a car accident, and your vehicle is totaled, if that vehicle had a value of $25,000, your Central Oregon Car Insurance company would only compensate you for about $18,000 of that vehicles value, this means that you can expect a “shortfall” of at least $7,000 that you would still be responsible for paying back to your leasing company.

Where it’s Necessary

Gap insurance is an important and badly needed “asset” for drivers who are leasing vehicles, put down less than 20% on a vehicle, finance for 60 months or more and have negative equity from a previous auto loan.

Gap insurance will be an asset to your Central Oregon Car Insurance Policy, to learn more about if it’s the right choice for you, or to get a gap insurance quote, contact the Farnsworth Agency today by calling us at (541) 318-88835.